Innovation at Chaucer – the skills, the process, the pipeline

From the potential of AI to the growth of Parametric solutions, insurers and our clients alike are looking for ways to manage and control emerging challenges to businesses. We spoke to Tom Graham, Chaucer’s Head of Partnerships & Innovation, about how the company is working to develop new products and grow their Innovation team to meet these ever-changing needs.

As someone with an engineering degree and more than 20 years of experience in the market, 16 of which were with Chaucer, Tom is highly experienced with how the company and market works, so well positioned to capitalise on his knowledge and relationships. It’s not all about experience however – according to Tom, being successful in Partnerships and Innovation involves a certain kind of brain and skillset.

Innovation at Chaucer is three things: the process by which we create change within the organization, thought leadership in terms of new ideas and philosophies, and finally the commercialisation of those ideas into actual products.

Partnerships’ role however, is to identify areas of the existing market which Chaucer’s underwriters are not active in and find ways to gain access to those classes of business, whilst utilising experienced counterparties.

The similarities in method and approach used by Partnerships and Innovation are many; they both involve extremely detailed analysis of the problem, working on multi-faceted projects and being accustomed to the time it takes to bring complex ideas to life. Bringing the two teams together strengthens our knowledge and experience of this environment - and brings opportunities to grow in both.

Well firstly, we’re people who perhaps look at things slightly differently. It’s a cliché, but we are people who think outside of the box, often ‘blue sky thinkers’ and problem solvers. We’re people who perhaps enjoy looking at things differently and challenging ourselves to try new ideas. Every day can bring something new, which forces us to look at different approaches - but also utilising all the knowledge that is built up within Chaucer. If we do our jobs right, we blend the balance of the two.

Working on Partnerships and Innovation also involves communication with all parts of the business, from the executives to actuaries, to the operations team and marketing. That’s on top of the work we do with external stakeholders who are looking for solutions. This means our people must be able to juggle multiple stakeholders and be confident and expert in our dealings with everyone.

The whole process of bringing a product to life can be intimidating, but we need to understand what it takes and treat it as business as usual.

The team is therefore designed to utilise the right people with specific experience and skillsets to embrace these challenges, whether that's running innovation week, working with teams to improve their market interactions or building the next revolutionary product.

Chaucer has a well-established presence in Innovation in the market, having successfully brought several game-changing products to market and participated in many market-wide events. We have a variety of methods for creating new products, we work with Lloyd’s Lab of course, where there is a great deal of triage that occurs before we begin working with partners. They receive mentoring and capacity to help get their projects off the ground.

We provide lead capacity to new product ideas, often through Insuretech but also through embedded teams and support of other insurers’ good ideas. What’s also fantastic and fundamental to the Lloyd’s brand, is that many leading markets in London are involved, collaborating together, all rowing in the same direction, wanting the same outcomes. It is complex, but great. We're also a founding member of the Howden Venture Group incubator project, aiming to bring good ideas quicker to market.

Partnerships tends to be more immediately focused on commercial outcomes. We work hard to identify the best underwriters and producers of business outside of Chaucer. We listen to what they need to do their job better and support them achieving those goals.

Our aim here is to be a stable, long term and seriously meaningful partner to them. We try and fit our product to their needs, whether it be straightforward such as a proportional program, or something a lot more complex such as multiline variable shares binder or consortia matching our risk appetite with clients’ capacity needs.

We usually have half a dozen things on at any given time, but projects can take up to a year to get off the ground. Currently, we have two very exciting projects close to fruition.

Firstly, we are working with existing partner Armilla on a new AI product for the market. Armilla are specialists in understanding and verifying the accuracy and governance of AI models, so are pretty critical in supporting the future of AI.

Another thing we are working on is building out the capabilities of our non-cat parametric weather team who joined us earlier this year. Their experience and understanding of this market are incredibly impressive. I have great hope for what we will be able to do with them over the next couple of years. As team leader Ed Byrne’s interview recently noted, we have already written our first deals on conventional weather products, and are looking to advance this to address more customised needs. We are thinking about how we can work with other teams at Chaucer to complement their product suite, especially in the energy sector.

In terms of Partnerships, we're going into the first renewals of our partner programmes.

Twenty months or so ago, we had a blank sheet of paper and some smart people in our business talking to one another. Now we have a full team, clients happy with what we’ve done for them and a pipeline of new deals.

We’ve supported businesses in a cross class, strategic way, providing initially small lines. Among the partners we work with, we have a team with a best-in-class approach to whom we have provided meaningful capacity, and we also work with a young business with hugely experienced underwriters for whom we see a great future ahead.

We are currently building a team with different skill sets at different points in their careers, but all with the same clear drive and direction.

We have some big projects planned for 2025 focused around supporting our colleagues in building new and improved products for our clients. The support we’ve received at Chaucer and the wider innovation community has been fantastic and enabled our immense progress in the past couple of years.

Due to the structure changes this year, we took a break from Innovation Week in 2024 but will be looking forward to doing something similar in 2025. We’re also keen to hear what the market is looking for and are very open to ideas! What kind of events do innovators need from us? What’s the best way to get heads together, explore ideas and progress the next generation of innovators? We are spending a lot of time thinking about this and are looking forward to developing it in 2025.